Augusta Economy

More News | Fort Gordon | Plant Vogtle | Savannah River Site | Editor

Georgia would feel minimum wage hike, study says

Sunday, May 25, 2014 12:53 PM
Last updated 7:21 PM
  • Follow Business

ATLANTA -- Democrats’ proposal to boost the federal minimum wage from $7.25 per hour to $10.10 would have the biggest impact in Georgia and surrounding states than in other parts of the country, according to a new study.

The party is hoping to make it an issue in this year’s Senate election, and its Georgia nominee, Michelle Nunn, tells supporters at every stop that she supports the increase.

“We need to raise the minimum wage, and we need to do it in a constructive way, and we need to do it in concert with business interests,” she said. “But I think it’s really important that people have a livable wage and that we really give people an opportunity for self-sufficiency.”

The Republicans hoping to face her in November each oppose a mandatory increase in wages. Both David Perdue and Jack Kingston argue it is just another hurdle plaguing employers.

“An increase in the federal minimum wage would present one more such roadblock and make it harder for entry-level employees to get their foot on the economic ladder,” said Kingston spokesman Chris Crawford.

Perdue spokesman Derrick Dickey offered a similar message from his candidate.

“The best way to raise wages is to focus on overall job creation and to create more quality jobs which will do more to raise wages,” Dickey said.

Equifax Inc. the Georgia-based credit-reporting agency, issued the analysis Thursday which is based on data it has on 54 million workers at more than 3,000 employers of all sizes. That’s roughly 40 percent of the U.S. workforce.

Among the findings is one showing the average hourly wage increase in Georgia would be 4.3 percent, 4.2 percent in South Carolina and the peak in Mississippi at 4.4 percent. In Oregon, it would be less than 1 percent, 1.3 percent in New York and 2 percent in California.

That’s because in other parts of the country, more workers already earn above the minimum wage than in the South.

So, workers here could get a bigger benefit. It also means employers here would face a bigger cost, which they could meet by raising prices, reducing hours, cutting jobs or shrinking profits.

“Some people are going to lose jobs while others are going to enjoy a wage increase. What I can’t tell from Equifax data is which,” said Amy Cutts, the company’s chief economist and lead author of the report.

Organized labor argues that Georgia companies can afford to boost wages. Chief executives of public companies in the state made more than 700 times the minimum wage last year, a time when the country’s largest companies averaged $41,000 in profits per employee, according to AFL-CIO research.

Georgia will be among the biggest winners from an overall economic boost created by the wage increase, according to Charlie Flemming, president of the Georgia ALF-CIO.

“To non-economists like myself, this makes perfect sense,” he said. “If working people have money to spend, they don’t sock it away for a rainy day, or to save up for a yacht. They spend it. They have to. They have no choice. They spend it at the grocery store and the gas station and all the other businesses, large and small, that make up their communities.”

To an actual economist, it won’t work quite that way.

Jeffrey Dorfman, a professor of applied economics at the University of Georgia, jobs will be lost and prices will rise. At a fast-food restaurant where nearly one-third of its costs go to personnel, the proposed 20 percent boost in the minimum wage translates into a 4-5 percent increase in the price of meals, which will hit the hardest among the low-income people Democrats say they’re trying to help, he argues.

Dorfman notes that the report isolates who actually is getting the minimum wage.

“Equifax’s numbers do a good job of showing how most of the workers that would be impacted are either quite young or quite old,” he said. “These are assumedly part-time workers with other family income (either parents or pensions) who do not depend on these jobs for economic survival. These numbers weaken the case for raising the minimum wage considerably.”

The report shows that 93 percent of teenaged workers and about half of those in their twenties earn less than the proposed minimum wage. In other age groups, roughly eight in 10 workers earn more than the target wage, leaving about 20 percent of workers over age 30 earning somewhere between the $7.25 and $10.10 an hour. More than one-third of hourly workers over age 70 also earn less than $10.10.

The data also reveals patterns in the mobility of hourly workers. By looking at workers who left one employer in the database and found a job with another one within a month, Cutts’s team discovered that those moving to another hourly job averaged a 26 percent increase in pay, and two out of three making what appeared to be voluntary job changes improved their paychecks.

The odds of a raise -- and a bigger one on average -- went to those who left hourly jobs for a salaried position. Three-fourths bettered their circumstances with an average of 39 percent more money.

Some conservatives argue that the minimum wage is designed as a starting point for inexperienced workers and that those who hustle climb their way up the pay scale.

While workers can benefit from turnover, the report showed that employers can suffer from it in terms of training costs, poor customer service and low morale. And pay isn’t the only reason staff leave.

Limited hours also play a part. Bosses that offer workers more hours have less turnover, according to the report. Each hour added to the workweek drops voluntary turnover 5 percent, Cutts notes.

“If they’re not paying attention to the bottom line of worker turnover beyond the paychecks that they’re writing... turnover will cost them more in the long run than the extra hour they’re giving them,” she said.

Should Congress raise the bottom wage, employers who reduce hours to save on payroll may feel the pinch in increased turnover, she said.

A copy of the complete Equifax report is available online: http://www.equifax.com/assets/WFS/miinimum_wage_wp.pdf

Follow Walter Jones on Twitter @MorrisNews and Facebook or contact him at walter.jones@morris.com.

Comments (31) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
burninater
9693
Points
burninater 05/25/14 - 02:16 pm
7
12
"Chief executives of public

"Chief executives of public companies in the state made more than 700 times the minimum wage last year, a time when the country’s largest companies averaged $41,000 in profits per employee, according to AFL-CIO research."
-------
Therefore, a chief executive could make 100 times the minimum wage, and still be able to HIRE 400 new employees AT THE NEW MINIMUM WAGE with zero change in compensation costs.

It's not that we can't afford to pay some of our hardest working Americans better. In fact, we could pay our lowest income workers more, AND increase hiring, AND still have CEO's making 100 times what some of their employees make, without changing costs.

It's that some folks are so greedy they have lost both compassion and common sense. Someone's going to make 700 times what somebody else doing an honest day's work makes, and then claim they can't afford to pay them $2.85/hour more?

What goes wrong inside some people's heads, that they think that is a moral behavior? It's sociopathic, plain and simple.

ruleoflaw
218
Points
ruleoflaw 05/25/14 - 03:46 pm
9
5
not exactly...

Burn wrote:
"Therefore, a chief executive could make 100 times the minimum wage, and still be able to HIRE 400 new employees AT THE NEW MINIMUM WAGE with zero change in compensation costs."

Social security payments for all of the minimum wage hires would reduce the number by 30 or so. You also have to add multipliers for total costs, including 401K, health care, workman's comp, etc. After adding all those, the number of workers would be reduced by 30-40%.
These things are not that simple...

What will happen is some jobs will be moved to the new minimum, and some jobs will be lost, since a you can hire more productive workers for $10/hr vs $7/hr. This will raise the average wage with less peopole working. Also prices will go up slightly for everyone.
Many people who lose their jobs over this will find it more difficult to find work, because they have a labor value of less than $10/hr. They won't be able to get OTJ training if there are other candidates who have >$10/hr labor value. You and I will pay either for their training, or for their livelihood.

To summarize, less jobs, higher average pay, higher prices, more Federal assistance.
But the minimum wage will be higher....Hooray!!!!!!

Gage Creed
17968
Points
Gage Creed 05/25/14 - 03:47 pm
11
3
Yeah... right... Facts from

Yeah... right... Facts from Richard Trumka.... regarding wages and equitable treatment.

You might want to look up Eddie York.....

Some union bosses....sociopaths, plain and simple.

LuvMyTown
2009
Points
LuvMyTown 05/25/14 - 03:49 pm
7
9
Raise the Minimum!

People working full time, right here in Augusta, and having to to collect food stamps because pay is low. Raise the price of hamburgers 5-cents and give folks decent pay and the incentive to keep working.

Gage Creed
17968
Points
Gage Creed 05/25/14 - 04:16 pm
11
2
LuvmyTown...do you really

LuvmyTown...do you really think the only thing that is gonna go up is a hamburger? And only 5 cents...

If the wage goes up 30-35%... how long do you think it will be "everything" goes up?

Enjoy!

fatboyhog
2025
Points
fatboyhog 05/25/14 - 04:34 pm
11
2
“We need to raise the minimum

“We need to raise the minimum wage, and we need to do it in a constructive way, and we need to do it in concert with business interests,” she said. “But I think it’s really important that people have a livable wage and that we really give people an opportunity for self-sufficiency.” Michelle Nunn
------
If it will get the government out of my pocket, and really give people an opportunity to be self-sufficient, then I say raise it! But the reality is, this is just another vote buying scam and scheme by the democrats.
And anyone who doesn't think the cost of goods and services will rise accordingly, negating the "pay raise", is either ignorant to the facts or a liar.

edcushman
7930
Points
edcushman 05/25/14 - 04:59 pm
7
2
"And anyone who doesn't think
Unpublished

"And anyone who doesn't think the cost of goods and services will rise accordingly, negating the "pay raise", is either ignorant to the facts or a liar."
Well said hog

myfather15
55764
Points
myfather15 05/25/14 - 05:06 pm
9
2
Gage Greed is correct!!

The price of burgers is not even close to the only cost that will go up!! I wish it were as simple as raising the cost of a burger 5 cents, then I would be absolutely ALL IN, for the raise. You're talking convenience store clerks, auto parts store clerks, and just about every cashier you can think of, including supermarkets; where teenagers take many jobs. Teenagers, making $10+ an hour and forcing us to pay more! The price of delivery to stores will go up, the price of benefits will go up.

So, until they can find a way to ABSOLUTELY FORCE, CEO's to take the loss in THEIR POCKETS, we will ALL pay for this increase. The only way to FORCE CEO's to take the loss is government regulation!! Otherwise, they will pass this cost down to us. THEN, we can thank government for making OUR living wage, more unliveable!! Then, we won't only be paying out the ceiling for gas, but everytime we eat; including and mainly at the grocery store!!

Unless you want a complete socialistic or communistic government, this is NOT what you want!!

Liberals and their way of thinking!! Absolutely amazing!!

myfather15
55764
Points
myfather15 05/25/14 - 05:11 pm
8
2
Liberals will never be

Liberals will never be satisfied until they drive individuals out of employing millions of people and government takes over!! Although Burninator's stats ARE incorrect, the principal is still true. CEO's do and ARE suppose to make much more than those they employ. But the employees aren't employing anyone and creating jobs!!

burninater
9693
Points
burninater 05/25/14 - 05:19 pm
3
9
"And anyone who doesn't think

"And anyone who doesn't think the cost of goods and services will rise accordingly, negating the "pay raise", is either ignorant to the facts or a liar."
-----
Um, y'all should stop and think about what you're saying before you use words like "ignorant" and "liar".

The proposed increase to minimum wage is 40%. This means that for inflation to "negate" the minimum wage increase, we will need to have 40% inflation across the American economy.

!!!!!!!

Minimum wage workers make up 2.8% of the workforce. The claim that a $2.85 raise for the poorest 3% of American workers will produce 40% inflation is absolutely, impossibly, ridiculous.

fatboyhog
2025
Points
fatboyhog 05/25/14 - 05:25 pm
6
1
Burninator

I am asking an honest question, do you own a business?

burninater
9693
Points
burninater 05/25/14 - 05:27 pm
3
8
"CEO's do and ARE suppose to

"CEO's do and ARE suppose to make much more than those they employ. But the employees aren't employing anyone and creating jobs!!"
-----
Really? All our jobs are just charity cases? Our labor and knowledge don't produce job-creating value? CEO pay just magically appears on money trees and they say "oh, gee, look at this, I guess I'll create a job today!"?

Where do you think the excess value comes from that allows CEO's to make their money in the first place, myfather? US. We aren't charity cases -- we are the engines. CEOs have simply placed themselves in the position to skim a dramatic amount of that value off the top. They don't create jobs. WE DO.

burninater
9693
Points
burninater 05/25/14 - 05:30 pm
4
8
"I am asking an honest

"I am asking an honest question, do you own a business?"
-----
Nope.

But not since my high school job 25 years ago has any business I've worked for had anyone on their payroll at minimum wage.

And yet they all stayed in business. Remarkable.

Gage Creed
17968
Points
Gage Creed 05/25/14 - 05:53 pm
8
2
And did any of the skill sets

And did any of the skill sets at your place of employment require an employee that would routinely say... wanna make that a combo?

fatboyhog
2025
Points
fatboyhog 05/25/14 - 05:59 pm
9
2
Low wage jobs

You sincerely believe that low wage jobs (fast food, grocery stores, etc.) could survive a $2.85/hr raise in salary without cutting costs somewhere? I can't speak for some businesses, but I know first hand as to how this rate hike will hurt the small business man. Either cost of goods goes up, or employee costs must be cut (or a combination). I don't know what you do for a living, but I know that someone who owns one small business has already been stretched to the limits due to other government mandated regulations imposed upon them. And while it's great that your business isn't paying anyone minimum wage, that's the EMPLOYERS choice as to what the pay rate is. The market should dictate wages, not the government. I stand by my statement that anyone who doesn't think a mandated wage will increase the cost of goods or services is ignorant or a liar.

Gage Creed
17968
Points
Gage Creed 05/25/14 - 06:12 pm
9
2
Yeah... you will only have to

Yeah... you will only have to raise the pay of the 2.8% of the labor force (a contrived number BTW) by $2.85/hr right? This will have no bearing on the employee that already makes more than minimum wage isn't that correct?

What of the companies with historically minimum wage employees that provide services to other companies? If you have a burger joint... your direct labor just went up.... your landscape maintenance just went up, your costs to have your kitchen hood cleaned just went up, your food costs just went up as supplier had to increase his costs to cover labor.

edcushman
7930
Points
edcushman 05/25/14 - 06:51 pm
7
2
" We aren't charity cases --
Unpublished

" We aren't charity cases -- we are the engines."
burn, when the gov't forces companies to increase wages it is just another form of welfare.

gargoyle
18726
Points
gargoyle 05/25/14 - 07:04 pm
4
0
SOP Dem. our policies have

SOP Dem. our policies have flamed out and crashed into the ground now how do we get them off the front page raise min. wage old saw. If that hadn't stuck to the wall there would be a crisis with Social Security that had the evil Republicans stealing grandma's check. With all things they have pushed blowing up in their faces going into the midterms expect all the old saws to be used.

bclicious
728
Points
bclicious 05/25/14 - 09:42 pm
3
0
The bottom line, is the bottom line...

Unfortunately, companies have a certain profit margin they expect to attain. They will do whatever is necessary to get to that profit margin. So, if they have to raise the price of the product or service; they will do that. If they have to layoff 1/3 of their labor force; they will most definitely do that. CEOs will always get their bonuses, and the poor will always be poor.

Gage Creed
17968
Points
Gage Creed 05/25/14 - 10:38 pm
2
0
@ bclicious

talk like that will get you labeled as unbridled capitalist....

deestafford
29042
Points
deestafford 05/25/14 - 11:41 pm
3
0
A few errors in the proponents reasoning....

A few errors in the proponents reasoning.

They want to look at the macro level and lump workers into large groups rather than breaking the problem down to the smaller, micro level. To say a CEO makes so much versus the workers is faulty reasoning. The CEO of McDonalds may earn millions of dollars per year and therefore could reduce his income by "x" amount and it would go to the "low" wage employees. The thing is that the workers in McD are paid by the francise owner who owns and operates the individual Mc D and not the CEO.

There also seems to be wealth envy as to the amount of income the CEO makes. They are worth what the board of directors believe he is worth to the company. A CEO has the ability to cause a company to go bankrupt if he makes the wrong decisions.

If the increase in the minimum wage is going to get people out of poverty, why has it not done so in the 20 plus times it has been raised in the past? Didn't do it then and why would we think it would do it now?

Companies are looking at automating more and more to eliminate low skill workers. McD is working on automated cashiers to eliminate the need for them. Some restaurants are making it possible to order and pay using a cell phone or tablet and all they have to do is pay for someone to bring the order to the table.

It doesn't take a high skill to say, "Do you want fries with that."

The bottomline is the employee's output has to be worth to the company at least twice what their compensation is. If not, the business will cease to exists.

Young Fred
18262
Points
Young Fred 05/26/14 - 01:55 am
1
0
burn

I know you're up to it, I kind of threw out a challenge to bod and friends, on the r&r. You're a very intelligent guy/gal, so take me up on it!

Probably try to bury me with questionable stats, while ignoring my very basic question(s). Which is why you champion that which seems to be so harmful.

Truth Matters
7269
Points
Truth Matters 05/26/14 - 02:53 am
2
4
If raising the minimum wage

If raising the minimum wage will make the cost of everything go up, why am I already paying more while the minimum wage stays the same? Costs of services go up without regard to wage increases.

The conservatives can't decide which side they are on. They don't want people on welfare such as Medicare and food stamps, but they don't want an increase in minimum wages which would get many off the social programs. Go figure.

Young Fred
18262
Points
Young Fred 05/26/14 - 05:51 am
3
0
Truth

"Cost of services go up without regard to wage increases"

What? Inflation cause prices to increase. Are you actually trying to say that wage increases have no part in the increase of goods and services? Really?

And then you take conservatives to task for being against the min wage and see no correlation between Medicare, food stamps, and welfare ? Really?

Talk about a disconnect!

Speaking of min wage, do you "see" any reason unions would support an increase?

Let's be honest, how many are making just min wage? When you go to the local mcd or Walmart do you see people that should be making more? Take a look around at those in line behind you. Do you think they should be paying 5 or 6 per gallon of milk instead of 4? Those that make min wage are making that for a good reason,

You people care not about those whom will be paying more. You've a one-track shallow mind it would seem. Ignoring consequences. But hey if it makes you feeeel good to be a union lackey, then more power to ya I suppose.

nocnoc
45423
Points
nocnoc 05/26/14 - 06:55 am
4
0
CEO to Franchise MW worker ratio is non-applicable

Lets take McDonalds,

The Lib's are tossing around a 100 to 1 ratio.
But they are comparing a CEO to a Hamburger flipper.
CORPORATE SALARIES are come from Franchise related fees.

Franchises vs CEO/HQ are 2 totally different business models.
=========================================
Let us use the 100 to 1 comparison to INVESTMENT & RISK.

A Franchise Owner vs. MW Worker is a Fair comparison.

FRANCHISE OWNER
Needs an initial down payment to purchase a new restaurant
40% of the total cost.

The down payment must come from non-borrowed personal resources, which include cash on hand; securities, bonds, and debentures; vested profit sharing (net of taxes); and business or real estate equity, exclusive of your personal residence.

Generally, McDonalds requires a minimum of $750,000 of non-borrowed personal resources to consider you for a franchise.
Now where does and how does a Franchise Owner acquire this weath?

HE EARNS IT.

An how does he usually earn it?
Extended Education, Business training, career knowledge, a stable life style, saving a part of income over a period of years.

So a Franchise Owner has almost a $1Million Dollars invested in the operation BEFORE he makes 1cent. Then like it of not he has to undergo Franchise training, send start up Mgr.s out for training and more, another $15-20k and he still has NOT opened the doors, Or sold the 1st Hamburger.

ADD TO THIS
FRANCHISE SERVICE FEE, a monthly fee based upon the restaurant’s sales performance which is currently a service fee of 4.0% of monthly sales.

BUILDING RENT, Yep the owner gets charge a monthly base rent or percentage rent that is 8.5++/-% of monthly sales.

THEN ADD
TAXES, Licenses, Health Dept certifications and related staff Health Code training. He hire accountants, lawyers, more to adhere to 3 Levels of Government BS, codes, reg's and political for permits.

WIFI FEE $10,400
LEASE RENEWAL FEE's $212K

So what does the franchise owner get for years of planning putting up about $1Million in assets well we still have more payouts before he gets a Penny.

NATION WAGE & SALARY AVERAGE
MW wage earners working full time (depending on the state)
$12,500 to $14,000... Plus they get a McDonald HQ Franchise require review and Bump in pay every 6 months anywhere from 10 cent to 30 cents per hours if they are doing their jobs really well. Many that stick with it for years are making $11+ p/hr

2nd Asst Mgr. gets about $31k - Basic High School, MC-Training 19-25 y/o

Store Asst Mgr. get about $40k - several years of on the floor training, staff mangement, production, good work record.

Main Store Mgr. gets about $60k - this is someone with real Upper-middle Manager level Skills.

SO WHAT DOES A FRANCHISE OWNER EXPECT TO MAKE?
After the long list of hassles and everything is paid out,
the Franchise owner make 8% on average off total sales.

McDonald's HQ is where the real money is at as you can see.
Minimum Wage increase will HURT the Franchise Owners not Corporate.

BTW: the Minimum Wage Earners Investment and risk.
A 9th grade or better education, ability to flip a hamburger
and show up to work or get fired.

nocnoc
45423
Points
nocnoc 05/26/14 - 06:55 am
3
0
Huffington Post - agrees, Big Mac increases from$1.28 to $5.27.

BTW: The Huffington Post (liberal Leaning) published a correction to an earlier article. In the incorrect article they admit they were provided incorrect data and based a story on it.

They have revised they article and now admit IF THE MINIMUM WAGE INCREASE GOES THRU, the price of a Big Mac would go up by $1.28 to $5.27.

http://www.huffingtonpost.com/2013/07/29/mcdonalds-salaries_n_3672006.html

nocnoc
45423
Points
nocnoc 05/26/14 - 07:02 am
4
0
Regarding Minimum Wage

Want to bankrupt the economy?
Pay a Private Land owing Farmer Minimum Wage.
Your food would be 2+X what it costs.

Heck most of America's poor would starve if the Government subsidies were removed.

deestafford
29042
Points
deestafford 05/26/14 - 09:34 am
0
0
nocnoc, Perhaps the best explanation of...

nocnoc, Perhaps the best explanation of the workings of the franchise owner of a McD I've ever read or heard. Thanks.

Many people don't understand/know/care that the majority of franchise owners started out at the bottom of McD and worked their way up to owner.

I've heard that McD is the largest private landowner in the US since they own all the land upon which their restaurants sits. Don't know if that's true but it makes senses to me.

Bizkit
33293
Points
Bizkit 05/26/14 - 11:38 am
0
0
This reminds me of the inane

This reminds me of the inane 97% of climatologist and man-made global warming argument. Turns out a recent poll of climatologist differs from the indirect measures that created the 97 number:
Not all scientists agree that global warming is man-made. Nearly half of meteorologists and atmospheric science experts don’t believe that human activities are the driving force behind global warming, according to a survey by the American Meteorological Society.

The survey of AMS members found that while 52 percent of American Meteorological Society members believe climate change is occurring and mostly human-induced, 48 percent of members do not believe in man-made global warming.

Furthermore, the survey found that scientists who professed “liberal political views” were much more likely to believe in the theory of man-made global warming than those who without liberal views.

“Political ideology was the factor next most strongly associated with meteorologists’ views about global warming. This also goes against the idea of scientists’ opinions being entirely based on objective analysis of the evidence, and concurs with previous studies that have shown scientists’ opinions on topics to vary along with their political orientation,” writes survey author Neil Stenhouse of George Mason University.

“The result suggests that members of professional scientific organizations have not been immune to influence by the political polarization on climate change that has affected politicians and the general public,” Stenhouse writes.

President Barack Obama and Democrats have often touted the “97 percent” consensus among scientists that climate change is driven by human activity, primarily through the burning of fossil fuels.

“Ninety-seven percent of scientists, including, by the way, some who originally disputed the data, have now put that to rest,” President Obama said while unveiling his new plan to combat global warming. “They’ve acknowledged the planet is warming and human activity is contributing to it.”

This new AMS survey runs counter to the notion of a “97 percent” scientific consensus and shows that there is much more disagreement among climate scientists than previously thought. The 97 percent number came from a survey of published environmental papers written by scientists from around the world, while the AMS survey measured U.S.-based scientists.

Bizkit
33293
Points
Bizkit 05/26/14 - 11:42 am
0
0
I wouldn't trust some posters

I wouldn't trust some posters comments to be accurate and not just manipulated arguments and cherry-picking. People will blow smoke up yer butt for sure. Then there is Obama who is blatant bone fide liar that no one should trust.

Back to Top

Search Augusta jobs